Abstract
Research on the method to strengthen the cooperation among members to achieve win-win result is an important subject in SCM. Nevertheless, most studies to date on supply chain pricing have only assumed that the market demand is only influenced by retail price but not by logistics service level. That is why our work is concerned with logistics service and product pricing strategies in supply chain consisting of the manufacturer, the retailer and the TPL provider. For three-echelon supply chain system with TPL service level, use game theory to analyze its pricing, production, service levels and profit allocation. Three different models are discussed which are based on Stackelberg games and cooperative game. We find that the whole supply chain profit brought by collaborative decision-making is much higher than it independent decision-making brings based on the research. And it can increase the whole profit through reasonable setting of allocation proportion of profit. The study proposes multiple effective distribution methods of supply chain profit and takes an example to perform empirical analysis on the results to proof effectiveness.
Highlights
The ThirdParty Logistics (TPL) plays an important role in supply chain management, which refers to a manner of logistics operation and management that manufacturer focuses on the core business by outsourcing the logistics to the professional logistics service provider
We assume a virtual supply chain which consists of a manufacturer, a retailer and a TPL service provider
The retailer pays fully for the logistic service provided by the TPL, which makes k1 = 0, kk21 = 1. we can get that with different service levels, the revenue of the total supply chain in cooperative game scenario is far larger than that in Stackelberg game scenario
Summary
The logistics service of the supply chain improved and other members of the supply chain such as manufacturer and the retailer have to shift the product prices correspondingly to maintain the profits All these behaviors stimulate the demand change in turn. A product pricing and service pricing decision model for supply chain coordination is suggested It can increase the whole profit through reasonable setting of allocation proportion of profit. The manufacturer satisfies demand for the retailer at p1 per unit to maximize its profit In this sequence, the order quantity Q, the p1 and the selling price p2 can be calculated as follows: p1 = {α + γs − β[c2 + k2 (k2c3 − c1)]}/ β (1+ k2 ). (represented by k1 ), the better the logistic service the TPL would like to provide, which would promote the sale
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